Information Note on the Court’s case-law 209
July 2017
S.C. Service Benz Com S.R.L. v. Romania - 58045/11
Judgment 4.7.2017 [Section IV]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Deprivation of property
Confiscation on grounds of strict liability where innocent owner could seek compensation from guilty party for breach of contract: no violation
Facts – In 2010 two oil tankers belonging to the applicant company were confiscated in the context of an offence committed by one of the company’s customers (which had misrepresented the nature of the goods carried to avoid payment of excise duty on fuel). The applicant’s alleged ignorance was not accepted as a defence. The domestic court also found that as the carrier it had a duty of diligence.
Since 2006 the Constitutional Court had validated the penalty of automatic confiscation, having regard to the possibility for the property owner to bring proceedings against the other party to the contract.
Law – Article 1 of Protocol No. 1
(a) Nature, legality, and legitimate aim of the interference – Being a final measure without any possibility of restitution, the confiscation of the applicant company’s oil tankers constituted a deprivation of property. Its legal basis was Article 220 §§ 1‑k and 2‑b of the Tax Procedure Code and the relevant provisions pursued a general-interest aim (sanction for tax fraud).
(b) Proportionality – In view of the offence giving rise to the sanction (undeclared carriage of goods liable for excise duty), the property confiscated (oil tankers) was not unrelated to the prevention of tax fraud that the legal provisions sought to achieve.
Under the relevant provisions, the confiscation of the means of transport was mandatory. The appeal court had thus taken the view that it was not appropriate to make a distinction as to whether the means of transport belonged to the offender or to a third party, or if the latter, to take into consideration that party’s personal conduct or the nature of its connection with the offence.
It thus had to be ascertained whether the applicant company had had a remedy enabling it to assert its defence of good faith more effectively.
The Constitutional Court had been called upon in a number of cases to examine the impugned provisions in the light of the argument that they authorised confiscation of property that did not belong to the offender. In its decision no. 685 of 2006, it had found that criticism unfounded, taking the view: (1) that by entrusting the vehicle to the customer, the owner had assumed the risk that the latter might misuse it; (2) that it remained open to the owner to claim compensation from the offender, through legal action on the basis of the contract between them; and (3) that a different interpretation would easily allow the law to be circumvented.
Well before the facts of the present case, the Constitutional Court had thus confirmed the existence of a remedy that could be used by the owner of the confiscated means of transport against the offender, on the basis of the general rules of contractual liability.
That case-law of the Constitutional Court, which provided an authoritative interpretation of domestic law, sufficed for it to be concluded that the remedy in question was effective. Moreover, that approach had been expressly enshrined in legislation on the carriage of goods, through Article 1961 § 3 of the New Civil Code (which had been made public in July 2009, even though it had only come into force a few months after the end of the judicial proceedings brought by the applicant company).
In cases where the European Court had found remedies of that kind to be ineffective, it was for reasons related to the particular circumstances of the case (for example, the insolvency or winding-up of the liable company, a serious risk of insolvency on account of the harsh fines imposed on the perpetrators of fraud, the death of the offender or the absence of domestic court practice in such matters).
As no particular circumstance of that nature had been relied on by the applicant company, there was no need to call into question the effectiveness of the judicial remedy available to it, by which it could seek compensation for the damage sustained. A fair balance had thus been struck between respect for its rights and the general interest.
Conclusion: no violation (four votes to three).
(See in the same vein (no violation): Sulejmani v. “the former Yugoslav Republic of Macedonia”, 74681/11, 28 April 2016; or by contrast (violation): Andonoski v. “the former Yugoslav Republic of Macedonia”, 16225/08, 17 September 2015, Information Note 188)
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This summary by the Registry does not bind the Court.
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